Dallas—Nov. 16, 2015—Riverwood Solutions, a provider of managed supply chain services and operations consulting, recently conducted a survey of supply chain executives. The survey, fielded among 600 supply chain executives, revealed that the majority of executives agree that getting from prototype to market is the most challenging aspect of bringing wearable technology to market and nearly half (48 percent) agree that the most difficult part of dealing with overseas suppliers is understanding their business culture. Sixty-two percent of the executives polled agree that quality concerns are the biggest challenge when selecting a vendor.
Thirty-eight percent of supply chain executives feel they lack proper visibility and communication with their vendors during the holidays, and 52 percent believe fitness trackers will be big this holiday season.
The Big Challenge: Getting from Prototype to Market
Fifty-two percent of supply chain executives agree that the most challenging aspect of bringing wearable technology to market is getting from the prototype to market:
- 19 percent say the challenge lies in making the technology work.
- 19 percent say sourcing custom parts is the challenge.
- 10 percent say raising capital is the challenge.
Nearly one in four executives also pointed to prototypes when asked what the biggest surprise was in getting a product to the market: 24 percent said they had no idea how time-consuming it would be to get from prototype to product and 19 percent said they underestimated how expensive getting from prototype to product would be.
Other surprises included:
- Vendors promising what they can’t deliver (19 percent).
- Not realizing how many vendors would work with (10 percent).
- Having to travel to vendors many more times than expected (10 percent).
Lost in Translation
Forty-eight percent of supply chain executives agree that the most difficult part of dealing with overseas suppliers is understanding their business culture:
- Nearly one in four (24 percent) cite difficulty validating capabilities of overseas suppliers.
- 14 percent say the difficulty lies in agreeing on terms and contract negotiations.
- 10 percent say the difficulty is working in different time zones.
In terms of supply chain risk, one-third of executives say the risk lies in single-source components. Twenty-nine percent have difficulty accurately predicting the volumes they need and nearly one in five (19 percent) say sometimes lead times are too long.
Ten percent say their technology is difficult to produce at high yields and another 10 percent say their vendor is too far away, and that puts their supply chain at risk.
Quality, Not Quantity
Sixty-two percent of the executives polled agree that the biggest concern when selecting a vendor is whether or not the vendor will be able to provide the quality needed.
Additional concerns include:
- Whether or not the chosen vendor will take the business seriously (19 percent).
- Whether or not the vendor is the right size (10 percent).
- Whether or not the vendor will help with product technology (10 percent).
Sleigh Bells and Supply Chains
Thirty-eight percent of supply chain executives feel they lack proper visibility and communication with their vendors during the holidays, and this is the biggest problem they face during the season.
Fourteen percent say they often overestimate how popular an item will be and end up with too much, and an equal number say they underestimate how popular an item will be and run out.
Ten percent admit that they don’t prep for the holiday rush early enough and 10 percent say they fail to process orders quickly enough.
More than half of supply chain executives (52 percent) believe that fitness trackers will be the most popular wearable gift item this holiday season. Another 38 percent are betting on the Apple watch and 10 percent think the most gifted wearable this holiday season will be other smart watches.